‘The company is effectively insolvent in both its financial and personnel assets,’ according to new report.
Nick Sampson, one of Chinese electric start-up Faraday Future’s founders has resigned, following news last week that the company is struggling to stay solvent.
Sampson’s departure comes only a day after senior vice president of technology and product development, Peter Savagian, also resigned.
According to The Verge, in his resignation letter, Sampson said “the company is effectively insolvent in both its financial and personnel assets; it will at best limp along for the foreseeable future. I feel that my role in Faraday Future is no longer a path that I can follow, so I will leave the company, effective immediately”.
“I cannot continue knowing the devastating impact we are having on the lives of our employees, their families and loved ones as we as the ripple effect this will have on lives throughout our suppliers and the industry as a whole,” he added.
In addition to the cuts announced last week, the company is now shutting down operations at both its headquarters and factory, with workers being placed on unpaid leave until new funding is secured.
In an email obtained by The Verge, CEO Jia Yueting said that all workers who had joined the company must take a furlough, which is expected to last at least until December.
Workers who have been with the company since before May 1 of this year will be allowed to stay on – however, they will be paid at minimum wage.
In the email, Yueting wrote: “we are grateful to all of the hundreds of employees who are willing to stay with the minimum wage and continue to work on the FF91 core project. This was an extremely tough decision to make, and we recognize the emotional stress and financial strain this puts on people’s personal lives”.
The lack of funding is a result of Faraday Future’s key investor, Chinese real estate firm Evergrande, refusing to sink any more money into the struggling business.
After being denied an advance on funding in July, relations between the companies publicly fell out, with Faraday Future in a statement saying it was “facing issues with its current funding because of Evergrande’s failure to live up to its end of the bargain and make the payments it agreed to”.
Since then, it has been trying to secure additional funding, and will only resume operations if an investor is found.
Faraday Future had previously aimed to launch its first model, the FF 91 crossover (pictured) in early 2019. Given this shutdown, it appears unlikely the company will meet this target, or even deliver the vehicle at all.
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